Djibouti - Economic Profile

What the indicators measure

Case study assumptions

Procedures to legally start and operate a company (number)

• Pre-registration (for example, name verification or reservation, notarization)
• Registration in economy’s largest business city
• Post-registration (for example, social security registration, company seal)
• Obtaining approval from spouse to start business or leave home to register company
• Obtaining any gender-specific permission that can impact company registration, company operations and process of getting national identity card

Time required to complete each procedure (calendar days)

• Does not include time spent gathering information
• Each procedure starts on a separate day (2 procedures cannot start on the same day)
• Procedures fully completed online are recorded as ½ day
• Procedure is considered completed once final document is received
• No prior contact with officials

Cost required to complete each procedure (% of income per capita)

• Official costs only, no bribes
• No professional fees unless services required by law or commonly used in practice

Paid-in minimum capital (% of income per capita)

• Funds deposited in a bank or with third party before registration or up to 3 months after incorporation

To make the data comparable across economies, several assumptions about the business and the procedures are used. It is assumed that any required information is readily available and that the entrepreneur will pay no bribes.

The business:

- Is a limited liability company (or its legal equivalent). If there is more than one type of limited liability company in the economy, the most common among domestic rms is chosen. Information on the most common form is obtained from incorporation lawyers or the statistical o ce.

- Operates in the economy’s largest business city and the entire o ce space is approximately 929 square meters (10,000 square feet). For 11 economies the data are also collected for the second largest business city.

- Is 100% domestically owned and has ve owners, none of whom is a legal entity; and has a start-up capital of 10 times income per capita and has a turnover of at least 100 times income per capita.

- Performs general industrial or commercial activities, such as the production or sale of goods or services to the public. The business does not perform foreign trade activities and does not handle products subject to a special tax regime, for example, liquor or tobacco. It does not use heavily polluting production processes.

- Leases the commercial plant or o ces and is not a proprietor of real estate and the amount of the annual lease for the o ce space is equivalent to 1 times income per capita.

• Does not qualify for investment incentives or any special bene ts.

• Has at least 10 and up to 50 employees one month after the commencement of operations, all of whom are domestic nationals.

• Has a company deed 10 pages long.

The owners:

• Have reached the legal age of majority. If there is no legal age of majority, they are assumed to be 30 years old.

• Are sane, competent, in good health and have no criminal record.

• Are married and the marriage is monogamous and registered with the authorities.

• Where the answer differs according to the legal system applicable to the woman or man in question (as may be the case in economies where there is legal plurality), the answer used will be the one that applies to the majority of the population.

 Draft the company's articles of association with a lawyer
Agency : Notary
There is no legal obligation to draft the company statutes with a lawyer and
since February 2014, statute templates are available online at the ODPIC
website (www.odpic.info). However, most entrepreneurs still draft the
company statutes with a lawyer.
Lawyers charge approximately FCFA 10,000 to draft the statutes.

When the statutes are drafted by a notary, the average cost is 100,000 FCFA.

Agency : Service des Impots
All new companies must register statutes with the Direction des Impôts.

publish the notice of commencement of activity
Agency : ODPIC
In order to obtain the name certi cate (certi cat negatif) and register with

the Companies Registry, at the O ce djiboutien de la propriété Industrielle

et commerciale (ODPIC), the following documents are required:

- forms CN1 and RC1
- 2 copies of the representative’s power of attorney
- 2 certi ed copies of the articles of association
- 2 copies of the bank deposit receipt
- 2 sworn statement copies or 2 copies of the criminal record.
The ODPIC is also in charge of the publication of the notice of
commencement of activity in the newspaper La Nation.

DJF 18,000 registration fees (immatriculation), DJF 18,000 for the publication and DJF 5000 name reservation

Register for taxes and obtain professional license (patente)

Agency: Tax Administration

Entrepreneurs must go to the Service des Patentes to obtain a license, using the registration number obtained at the registrar. This registration also serves as tax registration.

Companies from class 5 to 8 are exempted from paying the professional license fees during the first three years of the company.

Agency : Seal-making shop

Creating a company seal, letterhead and books can be done at the Seal-maker for DJF 2000 - 3000 (for seal and letterhead) + DJF 5000 - 7000 (books).

The Company must register and register each employee to the Social Security.